Over the years, you’ve placed your money, financial dreams, and aspirations in the hands of financial professionals. Like any pivotal relationship, the bond with your wealth manager should be based on mutual respect and a shared vision of your financial future. Trust, results, transparency, and timeliness should be the four pillars of a successful partnership with your financial advisor.
However, there may come a time in your relationships when it is appropriate to assess the quality of the partnership to determine if it is still aligned with your evolving goals and needs. This is not an evaluation that should be taken lightly. It demands a thoughtful, objective evaluation of a financial professional’s value.
This blog sheds light on five frequent reasons why people consider changing advisors. As a Nashville wealth manager, I talk with people daily about their financial expectations and realities. The advisor-client relationship is much more than just the numbers: It’s about partnering with someone who understands your goals, concerns, requirements, and dreams for your golden years.
Misalignment of Your Investment Goals
One of the foundational elements of any advisor-client relationship is having a shared understanding and agreement on investment goals. Yet, there may be moments in your journey when you may feel your financial compass is pointing in a different direction than your advisor’s. You may be concerned that your portfolio doesn’t reflect your risk tolerance, financial goals, or time horizon, so you might consider seeking an advisor whose advice and services are better aligned with your objectives.
It may be the performance of your assets, the risk you took to achieve the performance, or how your advisor kept you informed. You may have different priorities.
Drifting apart can be caused by several factors. From wedding bells to a baby’s first steps, or the day you stop working, your financial life evolves with your current circumstances.
It pays to remember that all of your hard work has earned you a life of amazing significance.
If your advisor does not respond to your concerns, it is time to consider a change.
Ultimately, ensuring that you and your advisor are working in tandem towards a common objective is not just a preference – it is part of the foundation that impacts your future financial security and lifestyle.
Effective communication is key to a trusting, open relationship with a financial professional. Your advisor is an honest, open professional who listens to your concerns and can explain your financial outcome in terms you can understand.
You want an open, honest dialogue about your assets’ performance and risk exposure.
Frequent communications with your advisor during increased market volatility becomes even more important. During these periods, advisors must be responsive and proactive in providing frequent updates about the performance of your investments and any changes that would improve your results. Unfortunately, some advisors tend to disappear during down markets because they prefer to avoid any accountability for their client’s losses.
This is particularly true when advisors are compensated with one-time commissions. They have no incentive to service their clients during difficult times.
The Trust Factor of Financial Advising
Trust is another foundational element of any successful investor and financial advisor relationship. After all, we’re talking about someone who will control or influence the achievement of your financial future. You must be able to trust that the professional will act with competence, diligence, and trustworthiness.
If you begin to feel that your advisor is not acting in your best interests, it’s not just a matter of convenience – it’s a potential red flag that should serve as a warning. The red flag tells you to proceed cautiously – everything may not be as it seems.
Silberman Wealth Insights: You must trust that your financial advisor will prioritize your interests. The alternative is an advisor who puts his or her interests first. These conflicts of interest will impact your financial peace of mind.
You should know the fiduciary status of your financial advisor. A fiduciary is legally obligated to always act in your best interests. This is not a soft promise or a marketing tagline; it’s a binding responsibility to place the client’s financial interests above all else. All financial advisors are not fiduciaries, so it pays to ask and obtain a written response.
When your advisor operates under a fiduciary standard, they’re committed to avoiding conflicts of interest, being transparent about fees, and always providing advice that they believe serves your best interests.
The weight of the financial advisor’s fiduciary status cannot be overstated. For many investors, knowing the fiduciary standard impacts their advisor is akin to having an added layer of trust and security in a world where too many people are out for themselves.
High Fees or Hidden Costs
Fees are essential to your relationship with a financial advisor. If you are paying too much for the advice and services you get, or if there are hidden costs you just became aware of, you may look for another advisor who offers a more transparent, competitive fee structure.
Be aware of hidden costs or additional fees buried deep in service agreements and contracts. You should not have to spend your time looking for this information because a trustworthy financial advisor will provide it to you without being asked.
Your goal should be someone other than the advisor who charges the lowest fee. Your goal should be to develop a relationship with an elite wealth manager who delivers the most value for the fees he or she charges for their knowledge, advice, and services. This is also true for other professionals (CPAs, attorneys, etc.) you depend on for specialized services.
You have many choices when it comes to who is overseeing the management of your financial future.
We could be a good fit if you are looking for a firm that values your achievements, understands that you’ve worked extremely hard to achieve your goals, and provides concierge-level wealth management services. Connect with us.
The views stated in this piece are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Cetera does not offer direct investments in commodities. Converting from a traditional retirement account to a Roth retirement account is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes. Re-balancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional. The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value
Registered Representative offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer and Registered Investment Adviser. Advisory services also offered through SILBERMAN WEALTH STRATEGIES, INC. Cetera is under separate ownership from any other named entity. Located at 320 SEVEN SPRINGS WAY STE 250, BRENTWOOD, TN 37027
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Some IRA’s have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney. Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. A diversified portfolio does not assure a profit or protect against loss in a declining market.